The country’s third-largest broadband provider, Vocus NZ, has been given clearance by the Commerce Commission to acquire 2degrees for $1.7 billion, as had been expected.
The combined Australian-owned business, which will be called 2degrees but headed by Vocus NZ chief executive Mark Callander, will have a total of a little under 1800 staff and annual revenues of $1.2b.
Vocus NZ, which has sometimes branded itself as Orcon, is the country’s third-largest broadband provider after Spark and Vodafone, but has not had its own mobile network up to now.
The Commerce Commission granted clearance for the takeover on Tuesday.
Deputy chairwoman Sue Begg said the watchdog was satisfied the merger was unlikely to substantially lessen competition in any New Zealand market.
“The evidence before us indicates that the merged entity will continue to face strong competition from existing competitors, including Spark and Vodafone,” she said.
“The focus of our enquiries was on wholesale and retail competition in broadband and fixed-voice and mobile services.”
Vocus NZ’s Australian owner, Voyage Digital, had planned to float Vocus NZ, under the name Orcon, on the NZX before it entered merger talks with 2degrees, which had separately been planning its own share market listing.
Vocus NZ has not commented publicly on whether a listing of the merged business could be an option down the track.
But the immediate focus of the business is expected to be on integrating the firms and continuing the roll-out of a new 2degrees’ mobile network which is being supplied by Sweden’s Ericsson and is capable of providing 5G services.
Spark chief executive Jolie Hodson indicated during a conference call last month that she did not expect the merger to significantly effect the competitive environment in the telco industry.
Jarden analyst Arie Dekker said in January that he saw it having only “relatively minor” implications for Spark and broadband network company Chorus.
“Like Vodafone NZ, we expect the new owners' focus to be inward, with extraction of cost synergies likely to be a bigger factor than revenue synergies, at least initially,” he said then.